Coronavirus lockdown | Hero Motocorp to pay suppliers in full to ease financial burden: Report

Hero Motocorp Chairman Pawan Munjal has assured suppliers and vendors that they will receive full payments in light of the lockdown extension, as per a report by The Economic Times.

Munjal’s announcement came during a virtual town hall and reversed a previous decision to invoke force majeure to defer suppliers and vendors’ payments. Munjal told 300 participants from Europe, South Asia, and India that the deferred payments will also be paid with interest, the report said.

“Now that the lockdown is extended, I am conscious of increased liquidity pressure … I am happy to announce that we have taken a proactive decision to make 100 percent payment from the next cycle itself. The company would also pay interest on the deferred payments. I hope this will help ensure liquidity management and ensure that employees and jobs continue to be protected,” Munjal told suppliers.

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Based on the previous force majeure decision, till April 3 the company has paid 50 percent dues to supply chain partners; while small vendors and MSMEs received full payments.

Besides this, Munjal also laid out plans for ramping-up of operations once lockdown is lifted.

Prime Minister Narendra Modi on April 14 announced that the lockdown to combat coronavirus pandemic will be extended till May 3 in a more stringent manner. Relaxations are, however, expected in areas with no new reported COVID-19 cases from April 20.

Globally, there have been over 20.6 lakh confirmed cases of COVID-19. At least 1.34 lakh people have died so far. In India, confirmed cases stand at 12,380. The death toll from the outbreak in India is at 414.

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